Burger King Corporation v Hungry Jack's Pty Limited

(2001) 69 NSWLR 558; [2001] NSWCA 187

NSW Court of Appeal

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Catchwords

1. Contract
2. › Franchise agreements
3. › Termination
4. › Notice of termination for breach
5. › Whether franchisee in breach of development obligations at time of notice
6. › Whether franchisor's own conduct prevented franchisee's performance
1. Contract
2. › Implied terms
3. › Good faith and reasonableness
4. › Commercial contracts
5. › Franchise agreements
6. › Whether development agreement subject to implied terms of co-operation, good faith and reasonableness
7. › Whether franchisor breached implied terms by imposing third party freeze and withdrawing approvals
1. Contract
2. › Termination
3. › Essential terms
4. › Whether development schedule was essential term giving rise to independent right to terminate at law
1. Equity
2. › Mistake
3. › Unilateral mistake
4. › Extension agreements entered into under mistake of fact
5. › Whether agreements should be set aside
6. › Taylor v Johnson (1983) 151 CLR 422

Quick Take

A franchise or development agreement is subject to implied terms of co-operation, good faith and reasonableness, and a franchisor who impedes a franchisee's ability to perform its development obligations cannot terminate the agreement for the franchisee's resulting non-performance.